BADGERING THE RAILROADS

press and to bother the railroads in the legisÎatures. Both tendencies are partly right, and both are vastly wrong. There is hardly a state in the country that has not suffered much at the hands of a railroad. Politics have been corrupted, laws have been laughed at, constitutional rights have been ignored all over the United States by the railroad powers. This present tendency is a reaction. In so far it is natural, and in so far it is right. In its operations it has already done much harm, and may do much more harm.

In

Last November, Idaho defeated a constitutional amendment which would permit the remittance of taxes for ten years on new railroads that may be built, and another amendment to permit localities to vote donations to railroads and for internal improvement. Ohio appointed a railroad commission of three members, and gave to this commission a right to fix rates which should be, prima facie, lawful, thereby throwing the burden of proof on the railroads. Arkansas, Indiana, Iowa, Minnesota, and many other states debated the two-cent fare idea, and in many cases this rate will undoubtedly become the legal maximum unless the railroads can prove it to be confiscatory. Maryland passed a little law which made it a misdemeanor for any railroad to refuse to

the railroads will try to adapt their plans to meet the new conditions. Instead of paying $9,000 for new coaches, they will cut the price down to $6,000. The greatest danger to the traveler is the flimsy coach, but the flimsy coach is cheap. Instead of building its “standard station" at a cost of $7,000, the railroad will patch up its old station, and make the best of it. More than one railroad in the West will delay its block-signal installation until it is forced to put it in, merely to save some of the money that will run out through the passenger service in a steady stream. These things will be done not with any idea of punishment or spite, but because the railroad is a business concern, not a philanthropic institution.

The people of the United States should be careful in their legislation, not headstrong, imperious, nor blind. In many of the accusations made against the railroads there is justice, but in many others that are finding to-day their expression in the instructions given to legislators there is neither sense nor justice. It is well to remember that an unjust law must, in the nature of things, bear harder upon the people themselves than upon any single creature of the people's making.

THE SAVINGS OF THE PEOPLE

URING the last fiscal year, the people of

amount offered were only two gallons. New York debated a law to increase the "freighttrain crew."

Undoubtedly the two-cent fare idea is the centre of all this law-making. It is rampant throughout the West. Because New York and other densely settled states of the East have established such a rate, Arkansas thinks it is also entitled to that rate. It does not matter that the real cost of carrying the average passenger a mile in Arkansas is double the cost in New York. It is of no importance that the average population per square mile in Arkansas is about twenty-five, while in New York it is six times as much. Nothing matters, except that the people have sent their representatives to the legislatures with orders to see that the rates are reduced to two cents.

The result will be a heritage of bitterness and hatred. In some few instances the railroad will undoubtedly beat the state through the Supreme Court, and earn thereby much.

of money that they had on deposit in the savings banks of this state more than $82,000,000, making the total amount of savings hoarded in these banks more than $1,335,000,000. This is a remarkable showing. It means that the savings of the people of this state have reached the highest point in history. It means that the confidence of the people in this beneficent institution, the savings bank, has remained unshaken throughout a year of exposure, growing distrust, and wild financial exploitation. On the face of it, it would appear to indicate quite clearly that the people of New York State have not been led from the path of safety into the more alluring paths of speculation and unsound investment.

Superintendent Kilburn, in his report on the savings banks of New York, sounds one note of alarm. He points out that, in the six months ending June 30th last, the people withdrew a great amount of savings from these

banks to invest in real estate. Three savings banks in this city had withdrawals on July 1st of over a million dollars apiece, apparently to take up real-estate debts which fell due at that date. Thousands of depositors pledged their savings bank pass-books to secure loans by title and trust companies, these loans being contracted in the purchase of suburban real

estate.

It is impossible to say how much of this great withdrawal was due to the out-and-out purchase of homes by the savers of money. It is inevitable that, as the smaller people gather together money, they should be moved to purchase homes for themselves, thus avoiding the payment of rent. Money drawn from the savings banks for this purpose is not a danger; in fact, it is one of the best economic signs that could be imagined. It tends towards stability, civic responsibility, and true citizenship. It does not mean a risk to the saver, but rather it means that his ability to save will be increased as years go by. A people that lives in homes owned outright by the individuals is a people that is fairly set upon the highway to comfort, if not to wealth.

Unfortunately, all signs point to the conclusion that a very large part of these withdrawals went to the purchase of lots and tracts of land, upon which the buyer does not intend to live. Thousands of people who have but a few hundreds of dollars have been led to purchase lands in the vicinity of New York, not with any intention of holding these lands, nor of building upon them, but with a hope that they will advance in price, enabling the buyer to sell them again at great profit. Up to the present time, this process has been fruitful of profit, but it is nevertheless a danger to the savers of money; and any movement that strikes at the individual small saver of money is a movement that strikes at the very life of the country itself. Such purchase of land is a speculation, and a speculation involving practically all the capital that is invested in it. The warning cannot be written too plainly nor too strongly that this speculation in lands is not a proper speculation or investment for the savings of the people.

The great increase in deposits in spite of these withdrawals is notable. We have come to regard the savings banks of New York State as the finest, soundest, and safest banking institutions in the United States. The laws that safeguard their deposits are jealously

guarded by the Savings Bank Committee, itself almost beyond reproach. Only in one or two instances in the last ten years have we seen attempts to subordinate the real interests of these savings banks to the interests of the great financiers. There has been no debauch of this, our greatest financial institution. We have kept, through a period replete with spectacular speculations and exploitations, this bulwark of our national well-being safe from all assault from without or disintegration from within.

One of the great reasons for the increase in deposits is undoubtedly the fact that some of the New York savings banks are paying 4 per cent. on deposits. There are seventy-six banks in the state which now pay that rate. The tendency is spreading. The small people, who cannot afford to buy bonds and stocks, are getting as good a return from these savings banks as the big investor can get from giltedge bonds. This is as it should be. We should not relax the laws that guard these deposits, but all legitimate inducements should be given to the savings banks to encourage deposits by whatever conservative means they can employ.

The savings banks of New York have now reached a point where they should be allowed the privilege of establishing branches. The objection to branch banks under national charters is well founded. It lies in the fact that the great national banks are tinged with speculation. The objection does not exist in the case of savings banks, and there is no doubt that if the banks were given the privilege of establishing branches, under a well regulated code that would prevent unnecessary competition and the drawing away of money from localities, the habit of depositing money as savings would grow amongst our people. There are many sections, even of New York City, that do not justify the establishment of separate savings banks, but that would justify the establishment of a branch of one of the great banks. Why should not these people, generally the poorest of all our people, be given the privilege of the savings banks? The movement at present under way toward this end is a healthy movement and one deserving of the strongest support. Our currency laws practically prohibit the investment of our national savings in government bonds. The next best thing is a sound savings-bank system. Some few states have it to-day. When will the whole nation have it?

THE AGITATION OVER SECOND-CLASS MAIL

HE report made by the Joint Congressional Postal Commission (which spent several months in investigating the question of second-class mail matter) perished of its own absurdities. Starting from the assumption that second-class rates are too low, and that the "privilege" is abused, these gentlemen suggested (among many changes) these remedial

measures:

(a) That magazines should not carry more than "half of their superficial area in advertising.

(b) No magazines to be sold at a reduced price with books or with any other "extrinsic inducements."

(c) Magazines to be printed on one kind and weight of paper throughout. (d) No supplements to contain advertising or to be a different size from the body of the publication.

It is safe to say that there are not five magazines out of the 100 most prominent American periodicals which could be published under such rules at least without so radically changing their business methods that the results would be entirely problematical. For the magazine publisher's business is an exceedingly complicated one, delicately adjusted to trade conditions which have grown up gradually and which cannot safely be altered by legislative fiat. The next logical step would be an editorial supervision of what the mazagines should publish!

The only explanation of these revolutionary, ineffective, and contradictory recommendations seems to be the unofficial one that the Commission decided to embody every suggestion made by any of its members or by any witness before it. The result may be imagined from the fact that one publisher, who sat down calmly to work out the precise effect of the changes advocated, discovered that the only two magazines which would be not at all affected by them werea sheet commonly believed to exist mainly for purposes of blackmail, and another so indecent that its very existence is astonishing and its admission to second-class entry unbelievable! Congress refused to take any action on these ridiculous representations-even the commonsense reduction of the payments to railroads being cut out of the Appropriation Bill in the closing hours. It did, however, adopt the most sensible suggestion in the Committee's report

The best informed investigators believe that the Government pays the railroads at least twice as much as the express companies pay for the same service; and there is a strong feeling on the part of many publishers against the common Governmental attitude toward the second-class "privilege." The publishers of this magazine heartily share this. There is only one sound basis for second-class mail charges: put the post office on a business foundation as regards salaries and railroad rates and bookkeeping and then charge what the service costs. There would seem to be something almost insulting in the point of view of many Congressmen toward the publishers. The Congressman is told that there is a large postal deficit; he forgets the vast burden of free mail matter carried for the Government, forgets the extravagant rural free delivery routes (so popular with his constituents but destined in the near future to double and treble the "deficit"); he remembers only the reckless statements by post-office officials as to the cost of handling and carrying secondclass mail matter; and, apparently viewing the magazine publisher as one of the many porcine special interests trying to get their feet into the public trough, he feels no proposition is too absurd to put forward as a measure regulating their greed, since they will not dare to talk much lest the public wake up to the special privilege they enjoy.

Of course, it can be, and is, plausibly argued that the Government deliberately made the second-class rates so low in order to enable newspapers and magazines to circulate cheaply to every corner of the United States; the present rate has created a number of periodical readers, and a grade of magazines unequaled elsewhere on the globe; and some of the lighter-weight, large-subscription-list magazines might have to raise prices to subscribers on such a basis as the logical proposed one of a fixed charge per piece (no matter how light), and then so much per pound additional. But the time seems to be approaching when the only dignified. or possible course for the magazine publisher will be to say:

"Find out what the mail service actually

would cost, run as we could run it for ourselves, and charge us that-and cease the absurd restrictions, the business interruptions from new rulings, the uncertainty as to what is coming next, as well as the degrading attitude of doling us out half-concealed charity at the public expense.

Meanwhile Mr. Madden, the third-Assistant Postmaster-General, whose course and rulings have kept this whole question agitated, has resigned. Undoubtedly, he was honestly trying to interpret and enforce the law as he saw it; but, whatever the cause, his administration neither succeeded in stamping out the obvious perversions of the second-class "privilege" nor in freeing the magazines of highest standing from constant annoyance.

It is, after all, not a great deal that the publishers ask in the administration of postal affairs: merely honesty and common sense.

WALL STREET AND THE PRESIDENT

TH

HERE is a curious note of fear underlying nearly all the Wall Street comment on President Roosevelt and his acts. It may not be true that the Wall Street powers regard Mr. Roosevelt as a declared enemy of the Street, but it undoubtedly is true that the average trader in Wall Street does so regard him. The late collapse in the prices of stocks is considered a tribute to his prowess, and the trader confesses that the future is dark and uncertain, principally because no mortal man can tell what "that man Roosevelt" is going to do next.

If one ask the Wall Street man upon what particular acts of the President he bases his fear, he will name the Northern Securities suit, the Beef Trust suit, the Standard Oil investigation, the Harriman investigation, and the Railroad Rate bill. If one point out to him that the Northern Securities suit was followed in Wall Street by a process of change, whereby the money-value of the old Northern Securities stocks advanced from about $400,000,000 to more than $800,000,000, he will retort that this was in spite of Roosevelt, not because of him. If one quote numerous railroad presidents as saying that the Rate bill has resulted in great gains to the railroads, instead of the great losses they so freely predicted before the act, he will confess that this has nothing to do with Roosevelt. It is all in spite of him and his efforts. If one ask what logical, or actual, effect the Beef Trust decision had in Wall

Street, there is no answer. These things are past and forgotten now, but the Harriman investigation is actual and tangible. The Wall Street man clings to that.

Mr. Roosevelt is a bugaboo to Wall Street. The average trader has an hallucination that the President hates Wall Street and would destroy it if he could. All the acts of the President touching upon corporations and their affairs are regarded as directed not so much at the corporation in question as at the stocks and bonds of that corporation. It is firmly fixed in the mind of the man downtown that the Harriman investigation has little to do with the railroads, but is aimed directly at Mr. Harriman and the high-priced stocks which carry his name.

It is an aberration, but it has become almost a fixed characteristic of the Wall Street mind. It does not apply to the President alone, but to all things. When the tickers tell of a storm out West, Wall Street cares nothing for the storm itself, but it anxiously enquires what railroads lie within its field of operation. It begins right away to figure out the cost of that storm in railroad net earnings. When Mr. Roosevelt undertakes to find out whether or not the law has been broken by the Union Pacific, Wall Street sees in the finding-out no motive and no meaning except the motive and the meaning that expresses itself in little figures on the tape.

Mr. Roosevelt, on the contrary, has failed to see in Wall Street anything but a mere part of the commercial machinery of the United States. He has not recognized its prerogatives as God-given. He has failed to admit that Mr. Harriman, Mr. Hill, Mr. Armour, and Mr. Rockefeller are above or beyond the law. He has not sought to be applauded in the Stock Exchange offices. In fact, he appears to have gone ahead upon his way without consulting the interests or the desires of the Wall Street people, small or great.

The trouble with Wall Street is that it cannot understand the President; and the trouble with the President is that he does not think it worth while to understand Wall Street. The gulf between them is very wide and very deep. It will never be bridged. Amenities there have been and will be between the two, but real sympathy never. Mr. Cassatt, Mr. Mellen, even Mr. Hill have, at times, met Mr. Roosevelt on his own ground, but only for a little time. These and many others of the leaders